Young's Mary Mackillop Today financial inclusion officer Judy Barker says more and more people are finding themselves in debt traps due to buy now, pay later schemes.
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She says welfare organisations have warned buy now, pay later users are purchasing items thinking they can afford to pay them off fortnightly but not considering other bills and their budget, leading to missed payments and late fees.
She said she is seeing the financial hardship caused by these schemes on a daily basis in the local community.
"Unfortunately you see people being left short then having to take out a high cost cash loan just to get by, meaning they're spending more money than they were before," she said.
"When applying for credit cards people are checked to see if they can pay it back but with buy now, pay later options they're not regulated and people can quickly and easily get in over their heads especially buying online at the press of a button.
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"Even buying cheap items really adds up if you buy a lot of them."
Ms Barker's job allows her to help low income earners or those receiving Centrelink payments apply for no interest loans scheme (NILS).
Mary Mackillop Today has provided NILS in the Young district since 2010 and had recycled more than $3 million in the Central West through people repaying loans so that the money could be lent out again.
"There is no interest, no fees or charges so whatever the item costs, that is what they pay," she said.
"Basically NILS is safe, affordable and fair and repayments can be as low as $20 per fortnight.
She also said it's important that people understand NILS isn't a "hand out, it is a hand up".
"It can be a much smarter choice than payday loans, rent to buy or buy now pay later options," she said.
Anyone who would like more information about finance options for people on a low income can ring Mary Mackillop Today on 6382 6328 or email young@marymackilloptoday.org.au.
